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CR75-p18-North america1:SJC-Casino Review 20/12/08 21:26 Page 1
Anurag Dikshit, the co-founder of PartyGaming, is to plead
guilty to breaking the prohibition on gambling online under
the Wire Act and has agreed to pay a fine of $300m
(E210m). He has also agreed to help the US Department
of Justice. Nonetheless, there is no plea bargain and he
could still face two years’ in jail.
A perfect
storm brewing
in the US
It has been said that the gaming industry goes into slumps earlier
than any other sector in the US and also comes out of them earlier.
If it is the national economic bellwether, given the most recent
evidence from around the US, we should batten down the hatches.
stormforces luck and a certain amount bad acquisition by private equity
UNITED STATES judgement, having bought the on the back of vast loans and to
three Primm venues in January development projects. They
If the huge casino resorts on 2007, at the height of the both have substantial repay-
the Las Vegas Strip are under market, financed by debt. In ments to make this year.
the weather, spare a thought 2008, the casinos failed to make Like many others, therefore,
for the off-Strip operators and its owners any money, con- Harrah’s is scaling back its new
the locals’ venues whose tradi- tributing to substantial losses builds. It has just pulled out of
tionally lower spending cus- over the nine-month period of a planned project to build a the process…be reopened for recession has only made the bonds will mature earlier, as
tomer base is failing to spend $101m (E72m). $500m (E356m) casino near bids.” impact of strong competition will a $490m (E348m) loan.
anything like the money they For the larger companies, Mulvane in Sumner County, Kansas, which took more from just across the state line The company currently
used to. which should be able to with- Kansas. In a letter to the Kansas than ten years to decide to in Pennsylvania combined operates four casinos in
Herbst Gaming, the opera- stand a longer period for return Lottery, Jeffrey Ungerer of allow casino gambling, opted with some poor management Atlantic City, but is hoping to
tor of the quirky Terrible’s and on investment, the problem, in Sumner Gaming, the joint to allow the development of decisions worse. Trump Enter- sell the poorly performing
Primm casino chains, is teeter- addition to lower visitor venture for the project in four venues. The proposal for tainment Resorts has delayed Trump Marina for $270m
ing on the edge of Chapter 11 numbers, is lack of credit. It’s which Harrah’s was the key one in Pittsburg in the south making a $53.1m (E37.8m) (E192m) to Coastal Marina.
bankruptcy after failing to not that there is no credit player, said: “We truly regret east of the state is in tatters interest payment on bonds for The strong trade winds that
meet a November deadline to around, just that some banks, that we must withdraw our after Penn National Gaming a permitted 30 days as it tries have propelled US casinos in
repay $847m (E602m) in loans. seeing that casinos operators gaming application as a result pulled out of the project. to restructure its finances. recent years have turned and
The company is working with are not making the money they of circumstances beyond our Casinos near Kansas City and There is no guarantee its nego- become, according to some
its lenders to come up with a used to, think it’s too much of a control that do not permit us Dodge City are still set to go tiations with lenders will be commentators, the perfect
restructuring plan. The gamble given their already sig- to meet the posed schedule for ahead. successful. storm. They are being buffeted
company has also failed to pay nificant exposure to debt. the project. In the event the In Atlantic City on the east Trump’s debt amount to from all sides and there will
up on two bond issues amount- Station Casinos and Harrah’s financial climate improves, we coast, casinos were starting to nearly $1.25bn (E889m); certainly be some that capsize
ing to $330m (E235m). are both up to their eyeballs in may be interested in reapply- struggle some time before the failure to make interest and others that will come along
Herbst is the victim of bad borrowings thanks to their ing for a gaming licence should economy hit the rocks. The payment will mean that the and pick up the wreckage.
Georgian politicians
press for casinos
southernhopes He said: “The only source of
continue to
UNITED STATES revenue readily available is casino
gambling. That coupled with the
The state of Georgia is once fact that once the business com-
shed jobs
again to debate the legalisation munity gets behind it, especially
of casinos within its borders, an the hospitality industry, and the
almost yearly event that will people demanding the right to
polarise political opinion. vote, and we’re going to have
State Representative Roger casino gambling in Atlanta.”
Bruce, a Democrat from Atlanta, He added: “The timing could not
employmentcataclysm in Vegas and the company has not The Venetian and Palazzo resorts shed plans to introduce a bill into the be better: we’re talking money and
UNITED STATES ruled out more in the new year.
200 jobs in December
General Assembly in January jobs…I think that if the people of the
When Sands stopped construction that would allow cities in the state of Georgia ever have the oppor-
Nearly every major casino operator is of its development projects around and thousands of workers and those state to vote in referenda on tunity to vote, the legislation will pass
making operational savings in the the world in November, about 11,000 thousands of workers buy cars, buy whether to allow gaming. with about 65 per cent…because
current desperate conditions. people lost their jobs, many of them washing machines. So it’s a major A long-standing supporter of Georgians love to gamble.”
One of the most troubled, Las Vegas in Macau. negative impact on the communities casinos in the state, Fulton County They may well do, but there will
Sands, said in December that it would November was a bad month for where we do business when we have Commissioner Rob Pitts, has also be objections from religious
cut more than 200 jobs from the Vene- workers in the American casino indus- to cut back.” begun lobbying the Assembly and groups, which could keep the pro-
tian and Palazzo resorts on the Las try: according to government figures, Elsewhere in Nevada, Black state Governor Sonny Perdue. posal in the committee stage. Even
Vegas Strip as part of its measures to nationwide 13,100 found themselves Gaming announced it was closing Pitts wants to see two casinos if the measures do pass, it would
save $100m (E70m). The jobs repre- out of work. the Oasis Hotel and Casino in built, including one in Atlanta likely be a couple of years before
sent two per cent of the 10,000-strong Frank Fahrenkopf, president of the Mesquite, with 500 losing their jobs, itself. He said additional revenues the economy is again healthy
workforce at the two venues. In American Gaming Association, said: while in Atlantic City, the Borgata from gaming would help the state enough to allow operators to make
November, 50 jobs were eliminated “These complexes employ thousands shed 400 positions. sort out its financial problems. the necessary investment.
18 January 2009 • northamericanews
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